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Plaintiffs in Airbnb discrimination class action face hurdles

July 7, 2016 - Diane M. Zhang

On May 17, Gregory Seldon, a Virginia resident, sued Airbnb in federal court, alleging racial discrimination in violation of Title II of the Civil Rights Act and 42 U.S.C. §1981. (Seldon v. Airbnb, Inc., 1:16-cv-00933 (D.D.C. May 17, 2017).) Seldon, a 25-year-old African-American man, had attempted to book a vacation rental in Philadelphia using the popular home-sharing company’s website but was repeatedly rejected by potential hosts. These same hosts accepted Seldon’s reservation request when he attempted to book their apartments under two fake Airbnb accounts he created that described him as a white male.

Airbnb is a website that connects homeowners with people looking to rent temporary lodging, making it convenient for people to list, find, and rent vacation homes. With more than one million property listings in nearly 200 countries, Airbnb is popular among travelers and emphasizes the importance of its peer-to-peer model, requiring all users to create a profile and upload a photo. The company encourages its users to use a photo of themselves; this—along with the fact that users’ real names are revealed on the site—makes it easier for a host to identify a potential guest’s race. The site also operates on a ranking system: Both hosts and guests are allowed to leave reviews accessible to all Airbnb users.

Seldon believes that hosts rejected his reservation requests because of his race. The first host told him that the apartment was not available—despite the fact that it had been listed as such—and Seldon attempted to find other accommodations. Hours later, however, he was still unsuccessful. Seldon then created two fake profiles—both of white men—and attempted to rent two apartments whose hosts had rejected him only a few hours earlier. His requests were accepted immediately. Seldon shared his experience online and was joined by thousands of other users who shared similar stories under the viral hashtag “#airbnbwhileblack.”

Companies based on a “sharing economy” model—in which a business connects people with goods and services to people willing to pay for them—have become increasingly popular, in part fueled by the convenience of mobile devices and social networks. Some connect renters to homeowners—such as Airbnb and VRBO—and some allow drivers to use their cars as temporary taxis, such as Uber and Lyft. But because of the unclear relationship between the company and the vendors who use its platform, discrimination within these services often raises novel legal questions.

Attorney David Barkey of the Anti-Defamation League—which notably led the fight against religious-based discrimination by hotels in the 1950s and 60s, including breaking the religion barrier at the Breakers Palm Beach—explained that public accommodation laws were enacted to prohibit establishments from discriminating against customers based on race, color, or religion. For example, it is well established that a restaurant or hotel cannot refuse service to Seldon on the basis of his race. But it is less clear what happens when a private individual who lists his or her home on a company like Airbnb discriminates against him. Public accommodation laws—including the two federal statutes that Seldon alleges Airbnb violated—do not fit neatly into sharing economy services for a few reasons.

The first hurdle is whether Airbnb itself can be considered a “public accommodation” for purposes of the lawsuit. Barkey pointed out some of the open questions. “Is Airbnb standing alone or is the service in conjunction with its hosts a public accommodation?” he said. “As to the latter, it will depend on the legal relationship between Airbnb and its hosts. In assessing these questions, it is important to keep in mind that the federal [public accommodation] statutes are actually quite narrow in the way they’re written: They only speak in terms of lodging over a certain amount, recreational areas, and entities that sell food. If you look at state and local laws, they’re often much broader and apply to any business that offers services to the public. Clearly, Airbnb would fall under that. But under federal law, it’s an interesting legal issue.”

Title II of the Civil Rights Act also has an exception for an individual renting fewer than five rooms in his or her home. Title II seems not to apply to people who rent out limited property on Airbnb, but the statute could also be interpreted to address Airbnb itself as a public accommodation—rather than each of its hosts as individual establishments. Seldon’s complaint takes this view, stating: “Airbnb is an establishment affecting interstate commerce or supported in their activities by the State as places of public accommodation and lodgings.”

The complaint also alleges that Airbnb violated 42 U.S.C. §1981, which prohibits racial discrimination in contracts. Barkey believes this to be a stronger argument. “If you’re using Airbnb services, you’re entering a contract. But how will [Airbnb] stop [discrimination]? Contractual provisions may be a good way of doing this, but how do you enforce these types of things?” The difficulty lies in holding Airbnb accountable for the decisions of individuals who use its website. Further complicating the issue, a plaintiff alleging a §1981 violation must show the defendant engaged in intentional discrimination. As some experts have pointed out, defendants may claim that the discrimination resulted from subconscious bias.

Barkey also cited class certification as another hurdle. “You’re talking about an apartment in Rio and a house in New York with different owners—and this brings up commonality issues. How do you shape the issue of commonality? You’d have to focus on the conduct of Airbnb—that Airbnb was knowingly tolerating acts of discrimination by the homeowners. Otherwise, you’re looking at the decisions of a lot of different individuals around the world, and defense counsel will focus on that,” he said.

Airbnb has responded to these discrimination claims and taken steps to assure the public that it does not tolerate such behavior. In a May 11 post on its website, the company announced steps it would take to eliminate the problem. Among other initiatives, the company plans to hold “unconscious bias” training for hosts through presentations and webinars, and it will also reexamine the website’s review process—which some critics argue aggregates unconscious bias, making it even harder for some users to rent apartments. But Airbnb is also cognizant of the increased risk of further lawsuits, particularly after significant media coverage about the racial discrimination experienced on its platform. On May 20, the company updated its terms of service to highlight its policy of prohibiting class actions and requiring disputes to be handled through arbitration.

The open questions surrounding the discrimination lawsuit against Airbnb are due partly to laws that have not kept pace with modern technology, forcing attorneys to adapt federal statutes to address situations they could not have anticipated. “When the 1964 Civil Rights Act came into being, there was no inkling that something like this would exist,” Barkey said. “The technology is just outpacing what the law is—and that raises some very interesting issues.” Airbnb is expected to respond to Seldon’s complaint within the next few weeks.